Kerry Group seeing sterling impact on its business

Food technology and ingredients company Kerry Group has today reported adjusted earnings per share growth of 5.5% to 341 cent - that was above its own and analyst expectations. Group revenue of €6.4 billion reflected business volume growth of 4.3% with its taste and nutrition division posting particularly strong growth. Today marked Edmond Scanlon's first set of results as CEO of Kerry Group.

Edmond Scanlon said the business performed very well with strong business development and volume growth opportunities. "The weakness in the dollar had a significant impact and we also had the sterling hit, but our sterling mitigation plans are well progressed." He said rising inflation in the UK had not yet adversely impacted its operations but that situation was expected to change. "There's a view that inflation is on the way up in the UK. We're not seeing it impacting yet but in 2018, it could have an impact on consumer demand."

Edmond Scanlon said Brexit had a role to play in the decision to make over 30 people at its Carrickmacross plant redundant. "Some of our plants in Ireland that are selling into the UK market and the sterling has had a negative impact and we have to be positioned as best as possible to be competitive in the UK market. We must bear in mind that we have 400 people employed there and have to run our business as efficiently as we can to ensure the long term viability of that facility," he added.

He confirmed that the group would look at more acquisitions in the coming months to support the overall business. "We spent €400m on eight acquisitions in 2017. We spent a further €80m on acquisitions in the last month. We expect to continue on the trail to support the business and we'll capitalise on our strong balance sheet," he concluded.

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Commercial real estate investment trust Green REIT has said its profit rose by over a fifth for the first half of its financial year to just over €53m. Rental income was also up by around a fifth to €33.7 million.

Commenting on Denis O'Brien's claims in Davos in recent weeks that Dublin was in the midst of a bubble in the office market, Green REIT's CEO Pat Gunne said that from a real estate perspective, the way we see it is that the low interest rate environment is very supportive of the capital market. "You've still got a decent gap between property yields and interest rates. And the success of the IDA and Enterprise Ireland in driving FDI is supportive of the occupier side where rents are at the previous peak, but the vacancy rate is low and the momentum, because of the Brexit factor, is quite positive from a real estate perspective," he said.

Asked about a potential glut of office supply if construction output continues at current levels, Pat Gunne said it was very difficult to predict beyond a certain point. "In the next 15, 18 or 24 months, it looks to be a market in relative equilibrium where the volume of take-up is matched by supply, but beyond that it's very difficult to tell."

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BUSINESS BRIEFS - The Central Bank has told the European arm of the New Zealand insurer CBL to stop writing business here. It follows a warning from regulatory authorities that the company needed to raise capital to boost its claim reserves in its French construction business. The company has about 12,500 household policies on its books here.

*** Eir has announced Carolan Lennon as its chief executive-designate. She is due to replace Richard Moat who is stepping down in the coming months when a majority shareholding in the telecoms company is taken over by a consortium led by NJJ Telecom Europe. CEO of An Post, David McRedmond, is to take over as Eir's non-executive chairman.

*** British bookmaker William Hill has been fined £6.2m by the UK Gambling Commission for breaching anti-money laundering regulations. Failure in the company's checks resulted in ten customers depositing large sums linked to criminal offences, resulting in gains for William Hill of around £1.2m, it said.

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